In a significant move that brings much-needed parity between old and new pension systems, the Central Government on Wednesday announced a major update to the Unified Pension Scheme (UPS). Under the new provision, Central Government employees enrolled under UPS will now be entitled to retirement and death gratuity benefits — up to ₹25 lakh — similar to those under the Old Pension Scheme (OPS).
Union Minister of State for Personnel, Dr. Jitendra Singh, made the announcement while addressing a conference marking the ministry’s reforms over the last 11 years. Calling it a “progressive step toward social security,” Singh said the government is committed to providing equal retirement benefits to all categories of employees under the National Pension System (NPS).
Retirement and Death Gratuity Now Extended to UPS
Until now, UPS-covered employees lacked parity with OPS counterparts on gratuity provisions. However, this new order by the Department of Pension and Pensioners’ Welfare (DoPPW) under the Central Civil Services (Payment of Gratuity under NPS) Rules, 2021, formally extends retirement and death gratuity to UPS beneficiaries.
“This order empowers employees to exercise an option — if they pass away during service, their family can choose whether to claim benefits under OPS or continue with NPS,” said DoPPW Secretary V. Srinivas in an interview with PTI.
He further clarified: “This will address long-standing demands and bring much-needed clarity for government employees.”
Employee Federations Welcome the Decision
The move has been widely praised by employee unions. Manjit Singh Patel, President of the All India NPS Employees Federation, called it a “historic and much-needed reform” and predicted that a large number of employees would now opt for UPS.
Patel added that the inclusion of Death-cum-Retirement Gratuity in the UPS will help clear confusion among employees about retirement benefits and further strengthen faith in the newer pension framework.
What the Rules Say
As per Rule 10 of the Central Civil Services (Implementation of NPS) Rules, 2021, employees already had an option to avail benefits under either NPS or OPS in the event of death during service or retirement on the basis of disability.
Now, this latest order clarifies that employees under the Unified Pension Scheme will also receive gratuity benefits up to ₹25 lakh — bringing them at par with OPS pensioners.
Finance Ministry’s Earlier Announcement
Earlier this year, the Finance Ministry had notified on January 24 that Unified Pension Scheme (UPS) would be introduced as an option within NPS for all new Central Government Civil Service recruits from April 1, 2025.
With Wednesday’s notification, DoPPW ensured that gratuity benefits under UPS are clearly defined and uniformly applied.
What This Means for Employees
This move is expected to drive greater acceptance of UPS among central government employees. It also reinforces the government’s broader agenda of making NPS more employee-friendly while ensuring financial security and retirement benefits comparable to OPS.
With these changes, UPS will now offer:
✅ Retirement Gratuity
✅ Death Gratuity (up to ₹25 lakh)
✅ Option to choose OPS benefits in case of disability or death during service
✅ Parity with old OPS system on key retirement benefits
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- My name is Kuldeep Singh Chundawat. I am an experienced content writer with several years of expertise in the field. Currently, I contribute to Daily Kiran, creating engaging and informative content across a variety of categories including technology, health, travel, education, and automobiles. My goal is to deliver accurate, insightful, and captivating information through my words to help readers stay informed and empowered.
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